Global competition and labor-intensive production in SMEs: Firm-level evidence from Japan at the threshold of the lost decades

Yuki Hashimoto

Journal of the Japanese and International Economies, 2025, vol. 75, issue C

Abstract: We analyze the effect of perceived global competition on firms’ reorganization plans. Using firm-level survey data from Japanese manufacturing SMEs in the late 1990s, we find that manufacturing SMEs perceiving intense global competition were more likely to consider hiring low-skilled immigrants despite being reluctant to increase R&D investment. This suggests that these SMEs were shifting towards becoming more labor-intensive organizations. Additionally, the positive relationship between perceived global competition and the intention to hire immigrant workers is partially mediated by difficulties in retaining young workers.

Keywords: Globalization; Immigrants; R&D; SMEs; Labor-intensity (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jjieco:v:75:y:2025:i:c:s0889158324000467

DOI: 10.1016/j.jjie.2024.101350

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